'The Biggest Problem In Mobile'

Cristina Cordova, who
works in business development for $200 million payments startup
Stripe, says that this problem – user retention – is "the biggest
problem in mobile."
Cristina Cordova

According to
VC Fred Wilson, one big reason consumer startups are not very
attractive to venture capital investors at the moment is that
"the consumer is moving from desktop/web to mobile/app" and
startups that are built for mobile are "more expensive and
time-consuming" to launch."

Distribution is much harder on mobile than web and we see a
lot of mobile first startups getting stuck in the transition from
successful product to large user base. Strong product market fit
is no longer enough to get to a large user base. You need to
master the "download app, use app, keep using app, put it on your
home screen" flow and that is a hard one to master.

Cristina Cordova, who works in business development for $200
million payments startup Stripe, says that this problem – user
retention – is "the biggest problem in mobile."

Cordovoa would know. Stripe helps mobile developers accept
payments, and it probably has lots of data about spikes in user
payments followed by fall-offs.

"Companies and the press often talk about downloads, flips,
check-ins or even activity among active users. They avoid
discussing monthly active users. Why? By far, the biggest problem
facing mobile companies today is retaining the users that
download their applications."

"An app is only a long-press away from being
dismissed to the second, third or fourth page of apps on a user’s
device. How mobile companies aim to defeat the retention problem
in a world of fickle social users will be their true
test."

She cites four startups that managed to get a lot of
initial traction, but quickly fell off:

Socialcam: In June, Socialcam had 83.6M monthly active users connected
to Facebook. Today, it has 4.3M. This is a decrease of 95% in 5 months.

Viddy: In June, Viddy had 20.9M monthly active users connected
to Facebook. Today, it has 660K. This a decrease of 97% in 5
months.

Draw Something: In April, Draw
Something had 36.5M monthly active users connected to
Facebook. Today, it has 9.1M. This is a decrease of 75% in 7
months.

Path: In December,
Path had 250K monthly active users connected
to Facebook. Almost one year later, they have about 780K monthly active users. While the
2.0 version of their app led to much initial growth, that growth
has not been sustainable.